16 December 2024 South Sudan enacts Financial Act 2024/2025 - The South Sudan Financial Act, 2024/2025 was assented into law on 25 November 2024.
- The Act amends various tax laws relating to Business Profit Tax, Withholding Tax, Sales Tax, Excise Tax and Customs Duties.
- Based on a Circular issued by the South Sudan Revenue Authority (SSRA) the changes became effective on 2 December 2024.
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On 25 November 2024, the President of South Sudan assented to the Financial Act, 2024/2025 (the Act). South Sudan's Transitional National Legislative Assembly (TNLA) had unanimously passed the Financial Act and Appropriation Acts on 9 September 2024. The Act introduces amendments to various tax laws including Business Profit Tax (BPT), Withholding Tax (WHT), Excise Tax, Customs Duties, other fees and charges imposed by various Government of the Republic of South Sudan (GRSS) institutions. The changes affect monthly WHT and Excise Tax returns for the month of December 2024 and onward. They also impact the BPT return for the Fiscal Year (FY) 2024. The key changes to BPT include the imposition of a 4% advance BPT on imported goods. Prior to the Financial Act 2023/2024, imported goods were subject to 2% advance BPT while non-food items were subject to 4% advance PBT. Business organizations are allowed to claim a tax credit for the 4% advance BPT incurred on imported goods at the time of filing BPT returns. The Financial Act 2023/2024 had, however, repealed advance BPT on imported goods. The Act has introduced a 30% tax on income derived from rental investments. This will only apply to businesses that are exclusively engaged in the real estate sector. Significant changes include: - WHT on payment to resident Government contractors has increased from 5% to 15%.
- WHT on payment to non-resident Government contractors has increased from 5% to 20%.
- A new 10% WHT has been introduced on mobile money commissions paid to dealers.
The Act has introduced several changes to excise tax rates on a range of products. Excise tax payable on certain items has been reduced and the excise tax has been added for certain products. This is summarized in the following table. Harmonized System (HS) code | Tariff description | Previous rate | Current rate | 22.01 | Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavored; ice and snow | 10% | 15% | 22.03 | Beer made from malt | 75% | 50% | 22.04 | Wine of fresh grapes, including fortified wines; grape must be other than that of heading 20.09 | 100% | 50% | 22.05 | Vermouth and other wine of fresh grapes flavored with plants or aromatic substances | 100% | 50% | 22.06 | Other fermented beverages (e.g., cider, perry, mead, sake); mixtures of fermented beverages and mixtures of fermented beverages and nonalcoholic beverages, not elsewhere specified or included | 100% | 50% | 22.07 | Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol. or higher; ethyl alcohol and other spirits, denatured, of any strength | 150% | 100% | 22.08 | Indentured ethyl alcohol of an alcoholic strength by volume of less than 80% vol.; spirits, liqueurs and other spirituous beverages | 150% | 100% | 24.02 | Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes | 150% | 100% | 24.03 | Other manufactured tobacco and manufactured tobacco substitutes; "homogenized" or "reconstituted" tobacco; tobacco extracts and essences | 150% | 100% | 24.04 | Products containing tobacco, reconstituted tobacco, nicotine, or tobacco or nicotine substitutes, intended for inhalation without combustion; other nicotine containing products intended for the intake of nicotine into the human body | 150% | 100% | 33.03 | Perfumes and toilet waters | 50% | 25% | 33.04 | Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or suntan preparations; manicure or pedicure preparations | 50% | 25% | 33.05 | Preparations for use on the hair | 50% | 25% | 33.07 | Pre-shave, shaving or after shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetics or toilet preparations, not elsewhere specified or included; prepared room deodorizers, whether or not perfumed or having disinfectant properties | 50% | 25% | 87.02 | Motor vehicles for the transport of 10 or more persons, including the driver | 25% | 10% | 87.03 | Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars | 80% | 25% | 87.04 | Motor vehicles for the transport of goods. | 25% | 10% | 87.07 | Bodies (including cabs), for the motor vehicles of headings 87.01 to 87.05 | 25% | 5% | 87.11 | Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without sidecars; sidecars | 50% | 25% |
a. Customs merchandise conversion value The Act reaffirms that customs duties shall be computed based on the Cost, Insurance and Freight (CIF) value. Where the customs value is in foreign currency, conversion to South Sudan Pound (SSP) will be based on the prevailing official exchange rate as published by the Bank of South Sudan (BOSS). This is a departure from the previous legislation, where the exchange rate had been set at SSP 300 per US$1. The Act revised the customs duty rates in accordance with the Customs Service Act, 2013. In a bid to promote local manufacturing, the Act has provided a relief through exemption from custom duty on importation of raw materials and intermediate goods. Custom duties will, however, be payable on the finished goods at the point of exit from the firm or company premises. The table below summarizes the changes to custom duty rates. Chapter | Tariff description | Tariff heading | Previous rate | Current rate | 2 | Meat and edible meat offal | 02.01 — 02.10 | 5% | 10% | 3 | Fish and crustaceans, mollusks and other aquatic invertebrates | 03.01 — 03.08 | 5% | 10% | 18 | Cocoa and cocoa preparations | 18.06 | 5% | 10% | 22 | Beverages, spirits and vinegar | 22.01 — 22.09 | 30% | 35% | 23 | Residues and waste from the food industries; prepared animal fodder; preparation of the kind used in animal feeding | 23.01 — 23.08 | 20% | 10% | 24 | Tobacco and manufactured tobacco substitutes | 24.01 — 24.03 | 30% | 35% | 39 | Plastics and articles thereof in primary form | 39.01 — 39.08 | 10% | 5% | 39 | Plastics and articles thereof not in primary form; sacks and bags of polymers (plastics); other articles of plastics | 39.09 — 39.26 | 10% | 15% | 41 | Raw hides and skins (other than fur skins) and leather | 41.01 — 41.15 | 10% | 20% | 42 | Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut) | 42.01 — 42.06 | 10% | 20% | 43 | Fur skins and artificial fur; manufactures thereof | 43.01 — 43.04 | 10% | 20% | 45 | Cork and articles of cork | 45.01 — 45.04 | 10% | 30% | 46 | Manufactures of straw, esparto or other plaiting materials; basket ware and wickerwork | 46.01 — 46.02 | 10% | 30% | 49 | Bank notes for foreign currency exceeding US$10,000 | | - | 0.5% | 50 | Silk | 50.01 — 50.07 | 10% | 15% | 51 | Wool, fine or coarse animal hair; horsehair yarn and woven fabric | 51.01 — 51.13 | 10% | 15% | 53 — 70 | Various | 53.01 — 70.20 | 10% | 15% | 71 | Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewelry; coins | 71.01 — 71.18 | 10% | 40% | 88 | Balloons and dirigibles; gliders, hang gliders and other non-powered aircraft | 88.01 — 88.05 | 10% | 15% | 88 | Other aircraft (for example helicopters, airplanes) | 88.02 — 88.03 | 10% | 20% | 89 | Ships, boats and floating structures | 89.01 — 89.02 | 10% | 15% | 89 | Ships, boats and floating structures | 89.03 — 89.04 | 20% | 30% | 99 | Export | | - | 18% | 100 | Re-export of strategic goods, for instance fuel, sugar, medicine and others | | - | 15% | 101 | Iron and steel in primary form (raw) | | 10% | 5% | 102 | Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories | | 10% | 5% | 104 | Clocks and watches and parts thereof | | 25% | 35% |
There are duplications in the new customs duty schedule under the Act, with certain items having varying approved custom duty rates and/or missing HS codes. Some of these items include: - Clocks and watches and parts thereof — 10%/35%
- Musical instruments; parts and accessories of such articles — 10%/25%
- Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof — 5%/10%
It is expected that the SSRA will provide further guidance and correct the errors. c. Trade accreditation permit On 5 October 2024, the SSRA issued a public notice that requires a person to obtain an accreditation permit for goods exported to South Sudan. The regulation was meant to curb the importation of counterfeit goods into South Sudan and to enhance customs-revenue generation. The accreditation permit can be obtained from the Ministry of Trade and Industry through the e-government portal here. The Act has introduced fees and taxes on lottery and gaming, including: - Excise tax at the rate of 10%
- Gross gaming tax at the rate of 24%
- Royalty on platform vendors/service providers at the rate of 20%
- Fees for application, registration, licensing and inspection of betting and lottery operations
Previously, only a 20% WHT was payable on payments relating to lottery and gaming. Other fees and charges - GRSS institutions The Act has introduced, as well as amended, various fees and charges imposed by various GRSS institutions. The revised fees and charges can be accessed through the SSRA portal here. The specified fees and charges will be collected by SSRA officers posted at the different GRSS institutions. Taxpayers should evaluate how the changes introduced by the Act as well as other related changes impact their business operations in South Sudan. | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: Ernst & Young (Kenya), Nairobi | | Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor |
Document ID: 2024-2303 |
